Bitcoin Is Not Trying to Be Visa

A diagram to show how the legacy financial system settles a transaction, notice where Visa sits inside the system.

Hi Plebs,

Many people think Bitcoin wants to replace Visa for making payments around the world. But this is not correct. Bitcoin and Visa have totally different jobs.

What Bitcoin Does

Bitcoin is digital money, like the U.S. dollar but with no government controlling it. Its job is to let people spend money without needing banks or credit card companies in the middle. Bitcoin transfers value directly between people over the internet.

What Visa Does
Visa is a company that moves traditional money like dollars between banks when you make a purchase. But Visa itself doesn't actually issue dollars. Its network processes payments, but doesn't control the money supply like a central bank does.

Different Roles

So Bitcoin is more like the dollar itself, while Visa is just the payment processor - similar to services built on top of Bitcoin like the Lightning Network. Comparing Bitcoin to Visa doesn't make sense because their roles are completely different.

How They Could Work Together

In the future, Visa's payment system could possibly use Bitcoin's network for final settlement, instead of using central banks and dollars. But today they operate separately, with Visa handling payments and Bitcoin being the currency itself.

The Instant Payment Myth

People think when you pay with Visa at a store, the money transfers instantly. But that's not true. Visa first verifies you have enough money, then allows the purchase, but actual money movement happens later through a process called settlement. So Visa transactions aren't really instant like people think.

In the end, Bitcoin provides the currency while companies like Visa could build payment services on top. But trying to replace one with the other misunderstands their totally different purposes.

Cheers, and onwards with Bitcoin.